ECB As European Lender Of Last Resort = Institutional Purveryor Of A Pan-European Ponzi Scheme

Reggie Middleton's picture

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Sat, 08/06/2011 - 20:55 | 1532052 P-K4
P-K4's picture

Martin Armstrong says, " This may be the last chance to save Europe. I have stressed numerous times that if you are going to create a single currency, there has to be a single national debt !" 

What are the chances that Germany and France (and the rest of the PIIGS) agree to that ? Jimmy The Greek might have said a trillion to one. The Euro is like the Tower of Babel and the multiple languages represent the various sovereign debts.

Cue in the other "Jimmy" at this point with, "All Along The Watchtower" - There must be somekind of way out of here, said the joker to the thief...


Sat, 08/06/2011 - 18:55 | 1531849 SwingForce
SwingForce's picture

I love you man, Reggie really, where's the coupon? I see this whole advertisement, there's no coupon? Not only that, but Fuck Europe, Fuck Greece, Fuck germany, what's the problem? USA downgrade? That's bonds, what about stocks? Please, Google & Apple are 20% higher than 1 month ago despite S&P 15% (exact) selloff, please write about something that ZH'ers can use. You're too obtuse on a fractal tangental macrame' bustiere sacre blue sniff this HALF DOW YIELDS MORE THAN 30 Yr Tbond after taxes- QE3 in effect dude, buy divd stocks, what say you? (coupon?)

Sat, 08/06/2011 - 18:18 | 1531784 moneymutt
moneymutt's picture

Ecb and fed may print, but I doubt either has the cajones to print as much as all the credit/debt that is going to get wiped out when all the banks fail....they should just print enough to cover the deposits to keep some base line economy going among regular folks but theynshould wipe out bank investors....get it over with....their "wealth" is debt to the likes of Greece.

Sat, 08/06/2011 - 17:57 | 1531716 Diet Coke and F...
Diet Coke and Floozies's picture


Sat, 08/06/2011 - 17:40 | 1531705 Marina Sorciere
Marina Sorciere's picture

I cannot disagree with your research from a mathematical standpoint; however, perhaps another viewpoint is necessary.


1.  The Euro was (poorly) designed to put into place a counterweight to the US economy and currency. This is still its primary raison d'etre.


This would then also ensure political balance in the world, carrying that ideology one step further. This is, indeed, badly needed.


2.  One must admit that the sequence of events in bond and currency markets internationally combined with the largely horrific "governance" in most nations create a mix where politics and political supremacy trump pragmatism/ sound research. The numbers are not relevant - neither is logic.


3.  With the changeover from Trichet to Draghi, a way will be found for the ECB to issue Eurozone bonds to compete with US Treasuries. A blended deficit ratio of 4.5% of GDP will be enough to float the latest pig with lipstick.


4.  Yes, moral hazard will be bumped up several notches everywhere and the era of fiat and ridiculous leverage can then continue a bit longer until the life soon to be discovered on Mars will be the bailer of last resort or the US economy recovers sufficiently to resume its former role of Ponzi Schemer No. 1, or... a balance will be found between social and economic commitment in Europe and the added debt may not be squandered on war, but spent on  producing actual goods and services.


At any rate, I don't think we should be writing off the Euro nor the ECB . Just because  it's looking at the moment like a wrongheaded experiment doesn't mean it won't be FORCED to succeed.


It's obvious that China (China and the Eurozone being each other's largest trading partners) and THE REST OF THE WORLD would like to diversify out of US waste paper, be that reserve currency or Treasuries. There is a lot more goodwill worldwide to back a further Eurozone "solution" than to continue funding a state which no longer seems to offer the world a force for good.


Sat, 08/06/2011 - 20:11 | 1531983 ISEEIT
ISEEIT's picture

Sad and disgusting truth. The political left represents narcissism. Cute how they distort truth into a lie. I get it that fangs and teeth have at times been bared from the right. End of the lesson though leaves the truth that the Left is evil and the right is merely mislead. I don't care for the Hegelian dialectic, but I do respect its obvious power.

The left is a pimp.

The right is the slave owner willing to let you free.

Sat, 08/06/2011 - 19:20 | 1531908 edotabin
edotabin's picture

Generally speaking I agree with you.  I think they will find a way to paper over any problems that seem insurmountable with some new moronic invention/concoction.

The main issue is internationalism and not the Euro or anything else.  I believe it is about a philosophy and not currency.



Sat, 08/06/2011 - 20:19 | 1532000 ISEEIT
ISEEIT's picture

Duh? Sorry. Not meaning any disrespect, but do ya think?

Sat, 08/06/2011 - 18:03 | 1531761 ImNotARobot
ImNotARobot's picture

If life is discovered on Mars, then we can invade it instead of starting a World War to try to deal with all of the economic problems on earth.  The only problem is, then the cuts from the Debt Ceiling Deal will go away, but oh well.  I think I might run for Congress on this platform.  It isn't anymore ridiculous than what they are doing now. 

Sat, 08/06/2011 - 17:21 | 1531666 Sudden Debt
Sudden Debt's picture

Europe's social system will be the first victim.

There simply isn't enough money to keep it afloat. In the past, reserves where build to be able to pay for them in the future and these where called the Silver Funds. Silver as in grey as in old people nest egg.

Every western country has used these funds in the last 3 years to save the banks, to save their bonds market.

Now those are tapped out. All the money is gone. But the payments to the people need to continue.... and actually can't.

Once the social structure crumbles, the unions will start to take back over and these will cripple the industry causing.... A PERFECT FIRESTORM ON EUROPEAN GDP's!

There are almost 5 million Americans on welfare. There are 50 million Americans on Medicaid. There are 8 million Americans receiving unemployment compensation. There are 10.5 million Americans on Social Security disability.

What America has here, Europe has in double...

Let's hope enough people get to pull their money out and save it in the right commodities before. Those who will "wait and see" will be proven so wrong...


Sat, 08/06/2011 - 17:06 | 1531642 Spitzer
Spitzer's picture

 The Eurozone is a net creditor with no trade deficit, the ECB controls the largest gold hoard in the world, the Eurozone is China's biggest trading partner, the Euro is the first non nation state currency in the world.

For all Europe's problems, they are miles ahead of the US. They are reluctant to print money, they are raising interest rates, they are allowing bond markets to implode, austarity is coming down the pike.

After the dust settles, oil will be priced in Euros.

King Euro

Sat, 08/06/2011 - 17:30 | 1531680 chubbar
chubbar's picture

Did you not follow the story line here? Austerity (which is potentially on the horizon) is NOT going to cover banks that are INSOLVENT today! The ECB is going to have to print their ass off and I mean starting NOW!

Sat, 08/06/2011 - 18:12 | 1531771 Spitzer
Spitzer's picture

Commercial banks across the US and Euro land will crash and burn, this whole system will crash and burn. The question is, what will be the most viable system to rebuild on, the Euro freegold system or the old Fed/dollar system ?

The Euro by a long shot.

Sat, 08/06/2011 - 18:47 | 1531846 Ahmeexnal
Ahmeexnal's picture


USD is green toiled paper.

EUR is pink/yellow/blue toilet paper.

The barrel of a gun will settle trades in the future.

Sat, 08/06/2011 - 19:24 | 1531913 Spitzer
Spitzer's picture

The barrel of a gun eh ....  How did that work for the Soviet Union ?

Sat, 08/06/2011 - 22:38 | 1532176 robobbob
robobbob's picture

The Soviet people knew that their system was a complete sham. When the end came, it was with a whimper, as no one was willing to die for a zombie that should have passed decades earlier.

Is there a single soul in all of Europe willing to risk life and limb for their disembodied Brussels establishment? National sovereignty has been all but nuetered out of consciousness. It will be riots and mayhem as disillusioned socialists demand to know who moved their cheese.

America, on the other hand, has the absolute FINEST of marketeers, circuses, and tasty free bread. When the end approaches, flags will be waved, music played, MSM cheerleaders raving, and the masses will eagerly march out to do their duty. Just name the axis of evil to be vanquished, and frame the right ad campaign. Hell, they didn't even bother to do that for the Libya dry run.

China, now that just might be another story.....

Sat, 08/06/2011 - 19:08 | 1531892 Manthong
Manthong's picture

A dipweed was on cable saying that folks are going to run to the "safety of paper" next week.

That appears reasonable because as also occurs in the case of diarrhea, it all ends up down the tubes in the end.

Sat, 08/06/2011 - 17:01 | 1531630 PulauHantu29
PulauHantu29's picture

It will be interesting to see the PM Frenzy in the EU ...if that purhcase data becomes available. The last I read people were driving to Switzerland and buying the barbaric metal by the ton:


Will the Centuries of Medici Uber-Wealth be wiped out in a few measley weeks?

Sat, 08/06/2011 - 17:07 | 1531643 toto
toto's picture

I guess you believe that PM will rise on Monday opening (at least in euros).

Sat, 08/06/2011 - 16:52 | 1531609 Hedgetard55
Hedgetard55's picture

"If today's broad market actions is confusing you, it shouldn't be."


Dude you need an editor, bad.

Sat, 08/06/2011 - 16:51 | 1531599 toto
toto's picture

Now I'm scared.

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